Sochi Blame Game: Under Armour Criticized for U.S. Team’s Performance


Most, if not all, sports junkies take sporting events extremely seriously. The Olympics are no exception. It’s easy to forget just how monumental the events surrounding the Winter Games are when we are watching on television screens halfway across the world, but one report from Bloomberg on Friday served as a good reminder of how impassioned athletes and their sponsors get about the Olympics, even about the most seemingly trivial things.

For the most part, U.S. athletes have fared well in Sochi, Russia, this year, but one team that has disappointed many onlookers is the American speedskating squad. Although the U.S. won four medals in speedskating at the 2010 Vancouver Games, no American finished better than seventh place in the six speedskating events held as of Thursday night, and now some critics are pointing fingers.

But who could be to blame? It’s not the skaters, it’s not the coaches, it’s not the rivals — it’s the sponsors. According to Bloomberg, several sources linked to the U.S. team have charged that Under Armour’s (NYSE:UA) suits are responsible for slowing down skaters in Sochi. Though Under Armour has denied any and all reports, CEO Kevin Plank said in an interview with Bloomberg Television on Friday, “We are making changes right now with our team on the ground,” adding that the company is OK with the athletes switching to a different brand’s suits if need be.

Bloomberg reports that some critics have blamed a design flaw in the suits’ rear ventilation panels for the skaters’ slow speed, but no charges have yet to be confirmed. It’s not unusual for sponsors to come under the spotlight when athletes are not performing well in their gear. The sports clothing company has long been known to thoroughly test its products before it outfits athletes, especially at the Olympics, so it’s possible the accusations against Under Armour are misguided.

Following reports against the brand, Under Armour shares were sinking 2.22 percent, sitting at $106.17 as of 3:10 p.m. Eastern on Friday. In his interview with Bloomberg Television earlier that day, Plank denied any suggestions that Under Armour’s reputation and international expansion plans could be compromised on account of the criticism from Sochi, but the company’s stock trajectory that day indicated investors weren’t so sure.

Prior to the Olympics blame game Under Armour found itself in, the Baltimore-based sports gear giant was reporting quarter after quarter of encouraging results. Bloomberg reports the company boosted its sales 35 percent to $682.8 million in the fourth quarter. That easily surpassed the average analyst estimate by 10 percent, reflecting 15 straight quarterly sales gains of more than 20 percent for Under Armour.

However, the problem is that Under Armour is now trying to expand its brand internationally, especially because it currently generates about 95 percent of its sales in the U.S., and the latest charges against the company could hurt its chances of scoring major deals with athletes and global corporations. Under Armour will have to work diligently to prove that its suits’ rear ventilation panels were up to snuff and met the company’s famed standards.

Bloomberg reports that the U.S. skating coach, Kip Carpenter, has yet to publicly blame the sponsor for his team’s performance, so it is possible that the accusations are only reflection of a case of some critics’ sour grapes. Carpenter told reporters this week that a skater doesn’t lose a second in the 1,000-meter race “because of a skin suit,” per Bloomberg; “Anyone who thinks that, does not know speed skating. In my opinion, the Dutch are just sitting deeper and pushing harder. They are just skating better than us.”

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